Office politics: a phrase that can cause a churning in the gut for anyone who has ever been involved in a sticky, awkward or challenging situation with colleagues or a boss.

Graduates who are used to a free-and-easy existence among booze and books may feel they are far away from such intrigues. Attracted by the prospect of top-quality training with a respected multinational organisation, or a prestigious law firm, they may not have given a second thought to whether or not they will fit into that company's culture. The opportunity to benefit from training in technical, on-the-job or even management development - perhaps leading to chartered status or a diploma within a set period of time - is often seen as the priority, along with a reasonable rate of pay.

But organisations are no longer looking for graduates who simply look good on paper. While IQ was once considered the benchmark for recruiting graduates, combined with the results of psychometric and "personality" tests, the reality today is different. Companies are sophisticated, and becoming increasingly complex. And research conducted recently in the United States proves that the majority of any organisation's high-achievers are those who use emotional competence in situations, rather than purely relying on intellect or a dynamic, go-getting approach.

Take the case of the cultural affairs officer at a United States embassy in North Africa, who receives a wire from Washington telling him to show a film featuring an American politician who is reviled in that country. "I knew that if I showed the film, this place would be burned down the next day by about 500 angry students. Yet Washington felt the film was great." What should he do? In a brilliant move, combining an awareness of the politics of the situation with common sense, he shows the movie on a holy day. Nobody comes: he is safe.

Daniel Goleman, formerly a science correspondent on the New York Times, and author of Emotional Intelligence, quotes this example in his new book, which focuses on using "soft skills" in the workplace. He explores how to develop raw emotional intelligence into emotional competency, which in turn can be used to turn difficult office and strategic situations into rewarding ones.

"In the new, stripped-down, every-job-counts business climate, human realities will matter more than ever. As organisations shrink through waves of downsizing, those people who remain are more accountable - and more visible. Where earlier a mid-level employee might easily hide a hot temper or shyness, now competencies such as managing one's emotions, handling encounters well, teamwork, and leadership show - and count - more than ever," he explains.

Ironically, while the average IQ is rising through the combined impact of better schooling, computer games which help develop spatial skills, and smaller family size, the average child's emotional intelligence quota - the EQ - is dropping.

Two groups of children were assessed, one in the mid-1970s, and another in the late 1980s. Dr Thomas Achenback of Vermont University, the man in charge of the study, concluded that the decline in emotional competency exhibited by the latter group of children - who were more lonely and depressed, angry and unruly, nervous, aggressive and impulsive - is not just a phenomenon in the States. Symptoms of this decline, such as drug abuse, crime and violence, bullying and unwanted pregnancies are seen worldwide.

So just what is emotional intelligence; and for those who do not have it, can it ever be developed? Goleman splits it into five elements: self- awareness, motivation, self-regulation, empathy and adeptness in relationships. Robert Worden, director of business research at Eastman Kodak in the US, remarks on one of the ways in which emotional intelligence can be seen in action: "It's not enough to be able to do a conjoint analysis, or sit at your computer excited about a fantastic regression analysis, if you're squeamish about presenting those results to an executive group. The ability to relate, to speak up and be heard, to be comfortable with yourself - these are the kinds of abilities that make the crucial difference."

Or, as the head of a Swiss bank, quoted in the book, puts it: "My job is something like a family priest or doctor. You can't be in private banking without using your emotional intelligence, especially empathy. You have to sense what your client hopes for, fears - even if he can't express it in words."

The ability to read social and political currents is crucial. "Every organisation has its own invisible nervous system of connection and influence," says Goleman. "Some people are oblivious to this below-the-radar world, while others have it fully on their own screen. Skill at reading the currents that influence the real decision makers depends on the ability to empathise on an organisational level, not just an interpersonal one."

What relevance does the concept of emotional intelligence have for the graduate who is clambering on to the first rung of the career ladder? How can such competencies be developed, if at all? In direct contrast to IQ, emotional intelligence is something which - for those who are willing to pay attention - can be cultivated throughout life, says Goleman. But he warns against an over-reliance on company training programmes, which may themselves fall short. "Too often the only real effect of training is that people get a short-term `buzz' that lasts no more than a few days or weeks ... While enthusiasm and a can-do spirit are helpful, they can only work to the degree that people have the underlying skills and learn the competencies to make them work."

Even developing an awareness that emotional intelligence can play a huge part in helping you to successfully manipulate the world of work is a huge first step. Some will instinctively have that awareness; others, who are finding it hard to get on and who constantly come up against "office politics" situations, may do well to consider it.

"Helping people master an emotional competence demands a new understanding of how we learn. It is time to stop lumping all training together," says Goleman.

The test comes as somebody automatically responds to a critical choice: emotional intelligence is all about rewiring the brain so that a reaction which may not come naturally is learnt, acquired and integrated. With the nurturing of these competencies, there are undoubtedly consequences, not just for the individuals in a particular office, but for the success of a company in a competitive, global market.

`Working with Emotional Intelligence' by Daniel Goleman is published by Bloomsbury at pounds 16.99